Germany: 19% gambling tax?

[KasinoKing]

I noticed that one of my payments for January from an MG operator was too low.
When I investigated, I found a pretty big deduction for "Tax".
I asked them about it, and they said since MARCH last year we have to pay 19% gambling tax on profit from German players!

I honestly have never heard of this before today and haven't had deductions for this with any other operator.
Have I just been very lucky up to now, or have I been living under a rock for the last 11 months?

KK

 

[jopaa]

Can you tell us the name of this aff program?

 

[ElaineGardiner]

Hi KK,

Unfortunately this is the case and has been for the last year. German tax authorities view Malta-based Gaming Operators as being subject to 19% German VAT and sports betting tax if they target the German market. We sent out communications to all our affiliates at the time. So if the operator you're referring to is in Malta, it will likely be the case as well.

There was a bit more about it here

Elaine

 

[KasinoKing]

Can you tell us the name of this aff program?

It is Brightshare.

It's hard enough to make a buck or two with them anyway (not helped by being on only 25%), and when I finally had a 3-figure month in January, I found I lost a fifth of my commission in tax!

Thanks Elaine - yes they are Malta licensed.

KK

 

[Guard Dog]

I have seen this in a few terms lately. It is getting more popular.

 

[AussieDave]

not helped by being on only 25%

I was on a 30% bespoke (still crappy considering they bundle). When they changed over to FA, they d#cked me 5%. Was never given any notification about that, and with the current sh#t going down with FA these days, I wouldn't be surprised if you were not informed about this tax fee.

 

[Mikew]

We had been informed about it right after it was published. I never really followed up to know more but it sure does hurt our share percentage on this market.

I have to ask however, does this mean operators licensed by Curacao, Alderney or any other one are not affected by this Tax?

 

[KasinoKing]

I have to ask however, does this mean operators licensed by Curacao, Alderney or any other one are not affected by this Tax?

I'm not fully qualified to answer that - but I would THINK that only companies based in, or licensed in the EU would be affected.
Other operators (the likes of who take USA players against the laws of that country) probably don't give a flying toss!

KK

 

[matt wilson]

So how does this work? is it just for affiliates or do punters have to pay the tax? ie if they won £100 they have to pay £19 in tax?

 

[bonustreak]

Makes you want to not market in Germany!

 

[Santomike]

I think this will increase across Europe over the next few years, especially with more countries trying to increase Tax revenues.

 

[KasinoKing]

So how does this work? is it just for affiliates or do punters have to pay the tax? ie if they won £100 they have to pay £19 in tax?

No, the tax is only applied to the operator, not the players.
The players get to keep everything they win.

i.e. If the casino makes £100 profit from a German player, the casino has to pay £19 in tax.

KK

 

[Guard Dog]

In other words... pass that on through to affiliates because casinos don't like to pay their own operating costs.

 

[KasinoKing]

In other words... pass that on through to affiliates because casinos don't like to pay their own operating costs.

Getting a bit cynical in your old age?
Our agreement with the likes of NetEnt, MG, etc. is that we get a % of NET Revenue.
i.e. A % of the casino's PROFIT.
Profit = Income (player's lost deposits), less ALL overheads and costs - just the same as any other business.

I think affiliates need to remember that when our players win, the casinos have to pay them out AND they still have a lot of overheads to cover as well. But this costs us NOTHING (Unless we are foolish enough to sign-up to NCO).

KK

 

[Guard Dog]

ha, probably a bit cynical yes.

I think also what affiliate programs need to realize is that we have to create a lot of content and spend a lot of money before we get a single player So - it does go both ways... can't we 'share' costs?

 

[falseadoom]

Not less all overhead costs.
They get a larger % to cover their costs and we get a smaller amount to cover our costs. Sure the casinos costs have gone up over the years but so has the affiliates.

If an affiliate is on 25% revshare and they had all German players minus 19% tax works out to 4% for the affiliate but the casino gets 75% still

Agree with guarddog - it should be split.

 

[slotplayer]

affiliates are paying the tax on 1/4 of the profits, the casino pays on 3/4.

 

[KasinoKing]

If an affiliate is on 25% revshare and they had all German players minus 19% tax works out to 4% for the affiliate but the casino gets 75% still.

Sorry - but that's completely wrong.

The tax is an OVERHEAD, deducted before they arrive at the Net Profit.
You get 25% of the PROFIT, the casino gets 75% of the PROFIT.

Like I said earlier, remember that when our players WIN, the casino pay 100% of the LOSS + 100% of their overheads.

32Red is a prime example for me, where my players have WON for 11 of the last 14 months:
My players have cost the casino £8,500 in net loss + their overheads + they paid me £750+ for the 3 profitable months.
So me advertising them on my website has probably cost the casino over £10,000!

KK

 

[TheGooner]

Agree with guarddog - it should be split.

It IS split - along with all OTHER costs - according to the terms of the affiliate share.
GROSS PROFITS - FEES (deposit costs, license charges, POCT taxes, charge backs) = NET PROFIT

Affiliate share is on NET PROFIT ... and obviously all fees come off the GROSS so are automatically pro-rated according to affiliate share.

 

[Guard Dog]

Yes, that last stuff is correct. We do share the cost. I should have checked my spreadsheet before I made my comment on that one. There may be some that do not share costs, but most do.